\u3000\u3 China Vanke Co.Ltd(000002) 588 Stanley Agriculture Group Co.Ltd(002588) )
In the first quarter of 2022, the non net profit deducted was 143 million yuan, with a year-on-year increase of 60.90%. The company announced that it is expected to achieve a revenue of 2.813 billion yuan in the first quarter of 2022, a year-on-year increase of 77.00%; The net profit attributable to the parent company was 150 million yuan, a year-on-year increase of 47.00%; The net profit after deducting non-profit was 143 million yuan, a year-on-year increase of 60.90%; The basic earnings per share was 0.13 yuan (0.09 yuan in the same period last year). The company released its annual report for 2021, and achieved a revenue of 6.436 billion yuan during the reporting period, with a year-on-year increase of 4.09%; The net profit attributable to shareholders of listed companies was 425 million yuan, a year-on-year increase of 47.81%; The net profit after deducting non-profit was 335 million yuan, a year-on-year increase of 30.94%; The basic earnings per share is 0.37 yuan / share (0.25 yuan in the same period last year), and it is proposed to distribute a cash dividend of 0.7 yuan (including tax) for every 10 shares. In 2021, the company sold 2.035 million tons of products, including 1.8635 million tons of field crop fertilizer and 440000 tons of cash crop fertilizer.
The increase in profits was mainly due to the rise in the price of compound fertilizer products. In 2021, due to the comprehensive influence of various factors such as the rising price of bulk raw materials, the increasing cost of environmental protection and the rising price of electricity, the production cost of fertilizer enterprises increased. Combined with the low inventory of downstream channels, the pull of international prices and other factors, the price of fertilizer continued to rise. Since 2022, the prosperity of compound fertilizer industry has continued. According to Zhuo Chuang information, the average price of compound fertilizer (40% Cl in Jiangsu) is 2829 yuan / ton in 2021, an increase of 20.21% over 2020; As of April 22, the quotation of compound fertilizer (40% Cl in Jiangsu) was 3900 yuan / ton, an increase of 18.18% over the beginning of the year.
Acquire 51% equity of Lihe fertilizer industry to further extend the industrial chain. In 2021, the company acquired 51% equity of Lihe fertilizer industry through equity transfer and capital increase. The main business of Lihe fertilizer industry is the production and sales of monoammonium phosphate, which is one of the raw materials of the company. Through the acquisition of Lihe fertilizer industry, the company’s industrial chain is further extended to the upstream, its sustainable operation ability and anti risk ability are enhanced, and its comprehensive competitiveness is further improved. In addition, the high-end fertilizer and high-efficiency fertilizer projects of 900000 tons will be built in 2024, including the high-end fertilizer and high-end compound fertilizer projects of Li River, including the high-end fertilizer and high-efficiency fertilizer projects of 900000 tons in 2024. After the project is completed and put into operation, Lihe fertilizer industry will become one of the top phosphate and compound fertilizer enterprises in North China and Northeast China, and the market competitiveness of the company’s products in the north will be further consolidated.
Actively promote the layout of phosphorus industry chain and open up space for future growth. The company announced that it plans to participate in the bidding of Songzi Yihua capital increase project. Songzi Yihua plans to raise no less than 540 million yuan, with a corresponding equity ratio of 49%. It plans to solicit one investor. The raised funds will be used to invest in the construction of new energy material precursor iron phosphate and matching facilities, comprehensive utilization of raffinate acid, new fertilizer and purified gypsum. After this capital increase, new and old shareholders must jointly invest no less than 3 billion yuan in Songzi City around the upstream and downstream industries of the capital increase enterprises in the next three years. According to Hubei Yihua Chemical Industry Co.Ltd(000422) annual report, Songzi Yihua has a capacity of Shanghai Pudong Development Bank Co.Ltd(600000) tons / year of diammonium phosphate, 800000 tons / year of sulfuric acid, 300000 tons / year of phosphoric acid, 83000 tons / year of fluorosilicic acid and 10500 tons / year of sodium fluorosilicate. Through this cooperation, the company’s industrial chain will be further extended to the downstream. The two sides will fully combine their respective advantages to form strategic coordination and resource complementarity in many aspects such as industrial chain extension and production and marketing coordination, so as to promote the industrial transformation and upgrading of the two sides and enhance the market competitiveness of the two sides.
Profit forecast and investment rating. We estimate that the net profit of the company from 2022 to 2024 will be 502 million yuan, 559 million yuan and 623 million yuan respectively, and the EPS will be 0.43, 0.48 and 0.54 yuan respectively. With reference to the valuation of comparable companies in the same industry, and considering that the company’s integration pattern will be further improved and there is large growth space in the future, the company will be given a certain valuation premium. Give the company 18 times PE in 22 years, corresponding to the target price of 7.81 yuan, and give the rating of “better than the market” for the first time.
Risk tips: macroeconomic downturn, lower than expected downstream demand, sharp fluctuations in raw material and product prices, safety and environmental protection risks
